There is much to justify the furore over the Libor scandal – Barclays' deliberate manipulations of its interest rate submissions, Bob Diamond's iniquities as chief executive, the possibility of collusion by the Bank of England, Whitehall, the Government, or even all three. But the revelations of the past 10 days are only the beginning. There is much more, and likely much worse, to come.
There is no question that Barclays behaved shamefully and that Mr Diamond had no option but to resign. Of greater concern for the future is that the political class immediately descended into unimaginative point-scoring. Such behaviour suggests not only a failure to comprehend the full implications of the Financial Services Authority's revelations. More worryingly, it also indicates a marked lack of the statesmanship that will be required to steer one of Britain's most important industries through the difficult times ahead.
So far, attention has been concentrated on Barclays "low-balling" its estimates during the financial crisis. With a signal lack of judgement, the Chancellor spied an opportunity to smear his political opponents, and in so doing gave the alarming impression of a man too small for his office. But George Osborne is not the only one to be distracted by his own opportunism. Ed Balls and the Labour Opposition showed barely more restraint. And as the Bank's Deputy Governor, Paul Tucker, faced the Treasury committee yesterday, it was his prospects of promotion to the top job hanging in the balance.
The meaning and provenance of Mr Tucker's October 2008 hint that Barclays' high Libor submission was ringing alarm bells is intriguing. But, for all the political hay-making and speculation about a grand conspiracy, it is Barclays' other Libor-related activities that should be the priority.
What the FSA revealed is repeated efforts by derivatives traders to have the bank's Libor submission tweaked to their advantage. Attempts to play down the exigencies of the worst crisis since the 1930s is bad; this, however, is worse. It is the clearest, most tangible evidence of the culture of casual, buccaneering amorality at the root of the near-collapse of the global financial system four years ago. As such, it is this that must be addressed. In such a context, the mud-slinging, party politicking, and barefaced expediency that has characterised the past week in Westminster should be seen for the sideshow it is.
Were the problems confined to Barclays, such concerns would not arise. But there are as many as 20 other banks under investigation over similar allegations. And, just as Libor is used as an international benchmark for interest rates, so inquiries into its manipulation, and the fallout from it, are spreading around the world. For all the new regulations in the aftermath of 2008, the global banking industry is yet to see changes remotely in proportion with the scale of the crisis it precipitated. The Libor scandal may just be the tipping point.
The questions that need answers, then, are not about politics and personality but about what happens next: how Libor should be set in the future, how to prosecute offenders, whether the Vickers reforms should be revisited. More than anything, a light must be shone into the darkest corners of banking practice. There will be resistance, as RBS's disgraceful refusal to co-operate with Canadian regulators attests. It will take concerted political will, from both the Government and the parliamentary investigation, to force the issue. And that means grasping the full implications of what has been revealed. Mr Tucker's explanations were informative, not pivotal. Mr Diamond, for all his faults, is not the one bad apple; he was just the first to be found.